A report published by De.Fi Security has revealed that the crypto industry lost more than $450 million through hacks and scams in the first quarter of 2023. The total loss significantly decreased from the $1.3 billion loss recorded in Q1 2022. De.Fi Security disclosed that out of the $451 million lost, over $210 million was lost in the first 20 days of March, leaving the rest spread over January and February. "While all attention has been on the unfolding banking crisis and a subsequent uptick in the Bitcoin market, we saw crypto losses mount to a 9-figure amount in March, and for the second month in a row. Hackers and scammers are upping the stakes as we count a total loss of close to $400 million in the first quarter of the year," the report stated.
Flash Loan Exploiters Stole Over $200M
Most of the losses came from two protocols – Euler Finance, exploited through a flash loan on March 13, and BonqDAO, through a smart contract vulnerability in February. They collectively lost $196 million and $120 million, amounting to $316 million. De.Fi Security discovered that the most significant losses were due to flash loan attacks, as more than $200 million was lost through them. However, regarding frequency, smart contract exploits were used most, followed by rug pulls and flash loans attacks. There were 17 smart contract exploits, eight rug pull cases, and six flash loan attacks. It is worth noting that the highest losses were recorded on the Ethereum network, while BNB Smart Chain had the most criminal cases. From January to March, hackers executed 18 successful attacks on BNB Chain, ten on Ethereum, and seven on Arbitrum.
$130 Million Recovered in Q1
Meanwhile, Euler Finance recovered roughly $130 million from its attacker. Being the only protocol that received a portion of its funds, Euler marked a 28.7% recovery rate for Q1 2023. "In conclusion, the significant surge in financial losses this quarter underscores the need for heightened risk management and vigilance when investing in the decentralised finance (DeFi) sector. It is crucial for investors to educate themselves on potential dangers and implement appropriate measures to protect their investments," De.Fi Security added.
